Research suggests that boards of directors tend to look outside the firm for the next CEO under which of the following circumstance?
A) when the company is prosperous
B) when the company is having R&D challenges
C) when the company is in trouble
D) when the company needs to follow a stability strategy
E) when the company needs to expand in order to continue growing

Question

Quizplus · Accepted Answer

Research suggests that boards of directors tend to look outside the firm for the next CEO when the company is in trouble. This is because they may perceive that an external candidate will bring fresh ideas and a different perspective to the company's problems. Additionally, an external CEO may be better equipped to make difficult decisions, such as implementing cost-cutting measures or restructuring the company, without being influenced by preexisting relationships or loyalties within the organization.

Research Suggests That Boards of Directors Tend to Look Outside